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The Tax Office plans to encourage more frequent payment and reporting from small business and explore tools such as a small business benchmark, the Tax Commissioner has said.
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ATO to pilot new initiatives for small business
17 September 2024
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The ATO will continue its push towards a fully digitalised tax system throughout 2024–25 and roll out a number of new initiatives focused on small business, Commissioner of Taxation Rob Heferen has said in a recent address.
Speaking at the Australian Chamber of Commerce and Industry event, Heferen said that digitally engaged small businesses with good record-keeping practices, and support from good tax professionals, "are more likely to not only be compliant with their tax obligations but get it right the first time".
Heferen said a key focus area for the ATO for the remainder of 2024–25 will be blueprinting "a future digitised tax experience for small businesses that is seamless, and supportive".
"In this future, small business can get their tax right from the start, allowing them more time to focus on their business and less on tax," Heferen said.
"While we are investing in this longer-term vision, we’re also committed to making immediate, impactful changes within our current systems."
Heferen said the ATO will be piloting several new initiatives this year including encouraging more frequent payment and reporting.
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Other initiatives will aim to reduce complexity by embedding rules and logic into the software used by small businesses to provide greater certainty.
The ATO will also look to empower small businesses with data by exploring how the evolution of tools like small business benchmarks could better help businesses understand and manage their tax and business performance.
"Through leveraging existing technologies and digital solutions we aim to make tax easier and more manageable, offering practical support where it’s needed most," Heferen said.
"Our approach balances being future-focused while delivering immediate and meaningful changes that help small businesses to meet their obligations today."
Heferen also warned that the ATO would continue using data and industry insights to identify "businesses operating in the shadows".
While the ATO understands that many businesses are facing a tougher economic environment, Heferen said the ATO also remained committed to ensuring businesses that do not comply with their obligations are not getting an unfair competitive advantage over other businesses that do pay on time.
"You can expect that we will be firmer and faster in dealing with unpaid GST, PAYGW and super. We will be looking more closely at remissions and deferrals and will tighten up payment arrangements," said Heferen.
Heferen said while the growth of collectable debt is slowing down, the ATO is still seeing some businesses that cannot afford to pay on time, but are not engaging with the ATO to put in place payment plans and take steps to get on top of their obligations.
"We are also seeing businesses who have capacity to pay, choosing instead to deprioritise payment of their tax and super obligations," he said.
"There is also a small subset of the business community who are deliberately concealing their income in the shadow economy."
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